Siro boss Keaney’s upbeat and ready to roll out, despite obstacles on way to building fibre broadband network
‘THE broadband? It’s OK.” John Keaney is CEO of one of the country’s two main fibre broadband companies. But where he lives in Co Wicklow, he has to make do with an old phone line. “It’s adequate,” he says. “But sometimes we try not to all be online at the same time.”
If Siro had hit its roll-out targets of 450,000 premises across 50 Irish towns by 2018, Keaney’s neighbourhood may now be closer to enjoying the fibre service’s glorious 1,000Mbs speeds.
But things haven’t quite worked out that way for the company. A combination of setbacks has seen the ESB-Vodafone joint venture ‘pass’ 325,000 premises as of mid-2020. Of that number, 65,000 are now actually connected, meaning they’re customers of a broadband retailer which resells the Siro infrastructure. Why the delays? “It’s been harder than we thought it would be in 2015, when we started,” Keaney says, citing issues such as consent from property owners, local planning permission and road developments.
Has that led to any tension from the two founding shareholders, ESB and Vodafone?
“They understand unforeseen issues that happen during a build,” Keaney says. “They’re comfortable where we are and they remain ambitious.”
Do they remain fully committed to the build-out and to Siro’s funding?
“Absolutely. They have decades of experience of investing in infrastructure so they know that there are challenges. But they’re in it for the long haul.”
Vodafone and the ESB had committed to spending €450m in rolling out the network. Last year, the company took out a €200m loan from five international banks to help bridge the financing. Structured as a five-year revolving credit facility, the debt suggests Siro will need to grow its network substantially to get into a comfortable financial position.
Keaney says that despite the company’s “challenges”, Siro is on track to get into the black soon. “By the end of this year, we will be making an operating profit,” he says. It can’t happen soon enough.
Other than build-out barriers, Siro’s looming problem is that its main competitor, Eir, has suddenly kicked into gear on its own fibre roll-out.
Aside from the 330,000 rural premises Eir has now ‘passed’ with full fibre broadband, it is now starting to build fibre to most of the rest of the homes and businesses in the country, pledging that 1.6 million of Ireland’s 2.2 million premises will be passed in the next few years.
On top of this, the Frenchowned former incumbent is showing a ruthless appetite for bare-margin competition, recently announcing a price cut to its higher-tier fibre broadband products.
Eir isn’t alone. Virgin may yet shift gears on its Irish footprint, which has been traditionally contained to the cities and conurbations.
And then there is the unknown effect of Ireland’s 5G mobile build-out. While this is slow, mobile operators have some plans to target chunks of the market with easy-to-install 5G broadband boxes which may rival entry-level fibre broadband services.
What may have seemed like a neglected market two or three years ago has morphed into a hotly competitive landscape. While there is still a clear advantage for first movers into an area, the opportunity to reach untapped green fields of slow internet users in suburbs and towns around the country is fading fast.
Keaney is still upbeat.
“We would have built in some projections around what competitors would do,” he says. “Besides, it’s not like Eir will build 1.6 million premises in the next quarter. There’s a lot to play for. And we’re doing quite well. Our penetration rate is around 65pc in the areas we’ve built. It’s a longterm build programme.”
What is the build target now? 450,000? More?
“Yes, I’m quite ambitious,” he says. “But it’s my job to make the business and funding case to the shareholders.”
Keaney says the lockdown has impacted the firm’s build-out plans a little, but not as much as it might have if telecoms had not been designated by the Government as an essential service.
However, the company is wrestling with whether its staff will return to a physical office or remain as largely remote workers.
“We have a fairly small office so it’s not as big an issue for us as some others, with their huge buildings,” he says.
“For most of the core work, we can do lots of it remotely without really needing to go back. Things like social interaction and team building are harder. A problem solving workshop is better when you’ve got the whiteboard in front of you or you can throw ideas around.”
Overall, Keaney things that Ireland is a much better place for broadband than it was.
“If you look at where we are now, we’ve got over 750,000 homes passed with fibre,” he says. “Given where we are with the pandemic and the need for everybody to switch from movies to work in the home, I think it’s a good overall job.
“I also think that we have been an important catalyst for this fibre build-out in Ireland, including all of the investment that has happened.
“So in terms of roll-out, we’ve revised our business and I think we’re on our way. I still think there’s a big opportunity to build beyond the original ambition.”
‘By the end of this year, we’ll be making an operating profit’